The IRS on December 30 issued Notice 2023-11 (Notice), providing temporary relief for certain foreign financial institutions (FFIs) required to report under the Foreign Account Tax Compliance Act (FATCA) US tax identification numbers (TINs) for certain pre-existing accounts as defined in an applicable Model 1 intergovernmental agreement (IGA). The Notice states that an FFI in an eligible Model 1 IGA jurisdiction that complies with procedures set forth in the Notice will be deemed to be in compliance with its reporting obligations under the IGA despite its failure to report US TINs associated with its pre-existing accounts.
A reporting Model 1 FFI seeking relief provided by the Notice must use codes provided by the IRS (TIN Codes) that identify features of these accounts that may explain why the reporting Model 1 FFI failed to report a US TIN. The IRS intends to use this information for accounts without US TINs to enhance its compliance procedures and to inform future options for Model 1 FFIs that continue to be unable to obtain and report a US TIN for certain accounts. The Notice states that if relief is granted in the future, the scope of the accounts for which FFIs may obtain such relief likely will be narrower than the scope of accounts for which relief is provided under this Notice.
Action item: FFIs should review the relief provisions — many of which require actions this year — and create processes intended to maintain compliance. The provisions relating to the solicitation for missing required US TINs may have the most significant external impact to the FFIs.